Digital billboard firm glows bright as advertisers are glued to screens
LONDON Underground was a mini-pioneer back in 2005. It led the way with a new form of advertising, replacing static posters with digital panels that changed as passengers rode up and down the escalators.
The idea came from an American advertising agency, whose UK managing director at the time was Tim Bleakley.
Today, Bleakley runs Ocean Outdoor, which specialises in high quality digital advertising in busy places, such as the Printworks entertainment centre in Manchest er, t he Aston Expressway in Birmingham and London’s Westfield shopping malls. It also operates in cities in Scandinavia and the Netherlands.
Digital displays have come a long way over the past 16 years. In streets, squares and retail hubs, Ocean broadcasts big events interlaced with ads, from Team GB’s recent successes in Tokyo to the Queen’s address to the nation during the first lockdown.
Panels strategically placed by roads that see heavy traffic can identify the make and model of individual cars and serve drivers with specific adverts, from insurance to rival vehicles.
A Royal Navy ad for the Submarine Service changes shape when people look at it for more than a few seconds, showing QR codes which take viewers straight to the Navy’s recruitment website.
The company has also started producing 3D ads which appear to come out of the screen, such as a Vodafone British and Irish Lions campaign at Piccadilly Circus during the rugby team’s recent test series against South Africa.
Ocean did its bit during the pandemic too, running ads for the NHS, offering cut-price deals for small businesses and supporting local heroes with creative displays.
Notwithstanding B leak ley’ s efforts through successive lockdowns, Ocean had a rough time last year. With consumers stuck at home, outdoor advertising had limited appeal so 2020 turnover fell 38 per cent to £86 million, the company recorded a pre- tax loss of £ 10.8 million and the workforce was cut by 16 per cent to just over 230 staff. However, Bleakley and his team used the year wisely, bedding down 2019 acquisitions, renegotiating contracts with landlords and investing in the future.
Demand is now recovering fast and brokers expect turnover of £ 107 million this year, rising to £125 million in 2022. A small loss is likely again in 2021 but profits of £14.5 million are forecast for next year, with further substantial gains pencilled in subsequently.
Big companies are increasingly drawn to digital advertising because they can do more with the medium and consumers tend to look at it for longer. Adverts can also be highly targeted around large events, from the UEFA Champions League to WWE wrestling matches.
Political events can be big draws too. Ahead of COP 26 – this autumn’s environmental summit – Ocean held a sealed bid auction, recognising that demand for its panels would be strong at such a highprofile event. The response has been enthusiastic, which should bolster revenues as the year draws to a close. Further ahead, Ocean is set on greater expansion, both organically and via acquisition.
New contracts are expected in places where the company already has a presence, there are plans to acquire more sites in the UK and Northern Europe and constant technological improvements should drive sales growth.
Acquisitions are also on t he cards, both in existing locations and elsewhere.
Some large investors have questioned Ocean’s exposure to shopping malls, given the popularity of e-commerce but Bleakley is sanguine, pointing out that, even if habits change, people will still always want to go out.
Ocean and its customers can swiftly adapt, placing screens where they will be seen.
Ocean is listed in London and its financial figures are produced in pounds and pence but the shares are priced in dollars, closing at $8.38 last week.
The anomaly arose because Ocean began as a public company by reversing into a shell firm backed by US investors. Over time, the stock should start to trade in sterling. Until then, investors can trade shares as easily as if they were quoted in our home currency.